Baroda BNP Paribas Multi Asset Fund NFO launched

 

Baroda BNP Mutual Fund is coming out with a NFO in the form of Baroda BNP Paribas Multi Asset Fund.


Baroda BNP Paribas Multi Asset Fund would be an open ended multi asset allocation scheme investing in Equity, Debt & Gold ETF.


The fund would be open for subscription from November 28, 2022 to December 12, 2022.



BNP Paribas Mutual Fund




NFO details for Baroda BNP Multi Asset Fund

Scheme Opens

28/11/2022

Scheme Closes

12/12/2022

Fund Manager

Mr. Jitendra Sriram

Mr. Vikram Pamnani

Benchmark

Nifty 50 TRI (65), Nifty Composite Debt Index (20), Domestic Price of Gold (15)

Minimum Investment

5,000

Fund Category

Multi Asset Allocation

Exit Load

Nil if 10% of total allotted units are redeemed or switched within 12 months.


If units are redeemed or switched beyond 10% limit within 12 months, then 1% of applicable NAV.


Nil if units are switched or redeemed after 12 months.

 

Baroda BNP Paribas Multi Asset Fund would be an open – ended multi asset fund investing across varied asset classes but within the set limit.


 

Additional reading: Click Here to read why there is no such thing as best mutual fund schemes.




Baroda BNP Paribas Multi Asset Fund Investment Objectives

The investment objective of the fund is to generate long term capital appreciation by investing primarily in equity & equity related instruments, debt & money market instruments, REITS/InVITs and Gold ETF.


There is no guarantee that the investment objectives of the scheme would be achieved.

 

  

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Baroda BNP Multi Asset Fund Allocation


The asset allocation for the fund would be something like this

Asset Class

Minimum %

Maximum %

Equity and Equity Related instruments

65

80

Debt and money market instruments

10

25

Gold ETFs

10

25

Units issues by REITS and InvITs

0

10

 

The above figures are only indicative and not fixed, the fund managers have the liberty to move across the asset classes depending upon prevailing market conditions as long as they remain within the mandate permitted.


The fund can also invest in REITs and InvITs if so desired.

 

A nfo means a new fund from a mutual fund house which was not available earlier.


With growing acceptance of mutual funds as a form of investment, mutual fund houses periodically introduce new fund offers so as to complete their basket of investments available for investors.


A NFO is usually what results in the beginning of a mutual fund scheme.


Other reasons being merger of schemes within the same fund house or merger or acquisition of two or more fund houses, these are rare instances though.


 

Additional reading: Click Here to read about the Advantages of Mutual Funds




NFO meaning

A nfo or a new fund offer is a method by which a mutual fund scheme raises the initial investment into the fund.


The new fund offer is available for purchase for a limited number of days only.


After which it becomes unavailable for fresh purchase or redemption for a couple of days.


Once this time duration is complete, the nfo no more remains a nfo and is treated like any other open ended mutual fund scheme.


In which you can invest and redeem as and when you please, considering it is an open ended fund and you comply with the necessary exit load calculations.

 


What is a Multi Asset Fund?

A Multi Asset fund means a mutual fund that invests in three or more asset classes.


Not all the multi asset mutual fund schemes were multi asset funds to begin with though.


Some were merged with other schemes after SEBI’s recategorization exercise in 2018 while some were launched after 2018 like Motilal Oswal Multi Asset Fund and Nippon Multi Asset Fund.

 


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How do multi asset funds work?

Multi asset mutual funds invest a minimum of 10% each in three or more asset classes.


10% is minimum but the fund manager can go as further as he wants to as long as a minimum of 10% is invested in three or more asset classes.


Assets usually invested in by Multi asset funds include but are not limited to :

  • Equity
  • Debt
  • International Equity
  • Gold etc.

 


The basic idea behind a multi asset mutual fund is to try and get the best out of each asset class with regards to both returns as well as diversifying risks.


Different asset classes perform well at different times and a multi asset mutual fund tries to capture each asset class when it is doing well and reduce allocation in the asset class that is performing poorly or the forecast for the same is poor.

 

 

 

 Should you invest in a nfo?


You can consider it if:

The new fund offer is a category of fund that is not existent in your mutual fund portfolio.


If it is going to be a part of your satellite portfolio.


If it adds a unique touch to your mutual fund portfolio.


If you understand the functioning, objectives and risks attached with the new fund offer.


The nfo mutual fund is aligned with your risk profile.

 


You should avoid it if:

The new fund offer is not going to add anything of unique significance to your mutual fund portfolio.


If the nfo is going to be a part of your core portfolio.


If the only reason you are investing is due to FOMO (Fear of missing out).


If you do not understand the investment style and risks attached with the nfo.


The nfo mutual fund is not aligned with your risk profile.

 


Summary

Multi asset mutual funds are more diversified than other hybrid funds.


A multi asset mutual fund can be a part of your portfolio but should never be part of your core portfolio.


The main idea behind a multi asset mutual fund is to diversify risks and not high returns.


It is important for you as an investor to be well aware as to what asset classes your fund is investing in since not all multi asset mutual funds are run in one particular manner.


Although most multi asset mutual funds are taxed as equity funds, not all are so you need to check that beforehand too.

 

 

 

For portfolio enquiriesemail us with your doubts at info@themutualfundguide.com



Disclaimer : While due precaution has been undertaken in the preparation of this article, The Mutual Fund Guide or any of its authors will not be held liable for any investments based on the above article. The above article should not be considered financial advice and has been published only for your perusal. Due credit has been given in case wherever required, in case you feel any part violates any rights then do get in touch with us and we shall get it duly removed.  
Mutual Fund investments are subject to market risks. Please read the offer document carefully before investing


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